Germany must transpose the EU’s revised energy performance directive (Gebäudeeffizienzrichtlinie, or EPBD) into national law by 29 May 2026. The vehicle for doing that is a new law called the building modernization act (Gebäudemodernisierungsgesetz, or GModG).
The federal cabinet is currently scheduled to adopt the act on 13 May 2026. The GModG is not yet law. It has not passed the Bundestag.
GModG is expected to be passed in late July or early August 2026. It’ll replace the current building energy act (Gebäudeenergiegesetz, or GEG).
What the EU directive actually requires
The EPBD was adopted by the EU Council on 12 April 2024 and entered into force on 28 May 2024. Member states have exactly two years to transpose it.
The directive’s central goal is a climate-neutral EU building stock by 2050.
For Germany, the most immediate targets are
- A 16% reduction in primary energy consumption in residential buildings by 2030, compared to 2020 levels.
- A 20–22% reduction by 2035, compared to 2020 levels.
The EPBD does not require individual homeowners to renovate immediately. What it requires is a national renovation plan showing how Germany intends to meet those targets. Germany must submit that plan to the EU Commission by 30 June 2026.
What changes for energy certificates
The most immediate practical change from the EPBD is to the energy performance certificate (Energieausweis). Today, Germany uses a scale of A+ to H. Under the new rules, a harmonized EU scale of A to G replaces it. It’s the same logic as energy labels on household appliances.
Under the new scale:
- Class A is reserved exclusively for zero-emission buildings (Nullemissionsgebäude).
- Class G covers the 15% of buildings with the worst energy performance in each member state’s national stock. As the threshold is relative, Germany will set its own kWh/m² cutoffs.
- Classes B through F are distributed in roughly equal bands between the two poles.
Old certificates do not automatically become invalid. Energieausweise already issued under the A+ to H scale remain valid for their ten-year lifespan.
Any new certificate issued after the national law takes effect must use the A-to-G scale. Because certificates are valid for ten years, both scales will coexist in practice for years.
The new certificates will also be richer in content. They must include
- CO₂ emissions data
- Concrete renovation recommendations with priorities
- For new buildings from 2028 onward, the lifecycle greenhouse gas potential.
When you will need an energy certificate
At present, you need an energy certificate when selling, renting to a new tenant, or constructing a property. From the date the GModG enters into force, you will also need a valid certificate when:
- Renewing a rental contract with an existing tenant.
- Carrying out a major renovation. Major renovation is defined as works affecting more than 25% of the building envelope surface area or costing more than 25% of the building’s value (excluding land).
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Failure to provide a required certificate carries a fine of up to €10,000 under current GEG rules. The GModG is expected to retain equivalent sanctions.
Owner-occupiers who neither sell, let, nor renovate remain exempt.
NOTE: The GModG’s exact wording on certificate obligations is not yet public. The 25% thresholds reflect the EPBD text. National rules could set different or additional conditions.
The renovation passport
The EPBD also requires member states to introduce a renovation passport (Renovierungspass). It’s a personalized, step-by-step renovation roadmap for an individual building.
The passport shows the sequence of measures to reach the near-zero-emission standard and what savings and funding are available at each step.
Germany already has a comparable instrument: the individual renovation roadmap (individueller Sanierungsfahrplan, or iSFP). Whether the GModG creates a new document or merges the passport with the iSFP is open.
What the GModG does beyond EPBD compliance
The GModG does more than just transpose the EU directive. Its politically most significant change is scrapping the so-called heating rule (65% renewable energy requirement for new heating installations) that was introduced by the GEG 2024. Under the GModG:
- Free heating choice returns. Gas and oil boilers will again be permitted without restriction on the renewable-energy share at installation.
- A bio-fuels ramp-up replaces the 65% rule. From 2029, fossil heating systems must be operated with a gradually increasing share of bio-oil, biogas, or green hydrogen.
- Landlords who install gas or oil boilers after the GModG enters into force must share in the cost of bio-fuel surcharges. Half of the grid charges, CO₂ price, and bio-fuel cost premium will be borne by the landlord, not the tenant.
What happens if Germany misses the 29 May deadline
Germany is almost certain to miss the deadline. The GModG cabinet decision is scheduled for 13 May, but parliamentary passage before 29 May is not possible. The reason is that the procedures of the Bundestag and the Bundesrat take several months.
So, the law is expected to enter into force in late July or August 2026.
Missing an EU transposition deadline exposes a member state to infringement proceedings and eventually financial penalties. Germany has requested a formal extension from the EU Commission.
NOTE: Until the GModG enters into force, the current GEG 2024 remains in effect. Don’t assume the new rules apply yet.
What this means for you right now
If you own a property:
- Your existing energy certificate stays valid until it expires. You don’t need to act now.
- If you are planning a major renovation or are renewing a tenant’s lease after the GModG takes effect, budget for a new certificate using the A-to-G scale.
- Buildings in the bottom energy classes (the future G class) will face growing pressure from buyers and banks. ImmoScout24 data already shows that properties with good energy ratings hold their value better than those with poor ones.
- KfW and BAFA renovation grants remain available under current rules and are confirmed until 2029.
If you are buying a property:
- Ask for the current energy certificate. From the date the GModG takes effect, you’ll also have the right to see it at viewings under the extended disclosure rules.
- Factor in potential renovation costs for properties in lower energy classes. Banks already routinely request energy certificates and renovation plans as part of mortgage assessments.
If you are a landlord:
- If you install a gas or oil heating system after the GModG enters into force, prepare for mandatory bio-fuel cost sharing from 2029.
- Lease renewals will require a valid energy certificate. Check when your existing certificate expires.
